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Strictly speaking, Vodafone has not downgraded its own targets – because it is the first time that the company has issued guidance over earnings.

But analysts had been expecting the figure to be more than £12bn. The shock warning sent shares down 11.85p to 205.3p. The group confirmed that, for the third year in a row, it paid no corporation tax in Britain – despite making profits of £187m.

This is because the company is allowed to write off debt interest payments on the money it borrowed to buy airwave spectrum from the Government.

It can also claim capital allowances because of its spending on masts and wires across the country. In the UK, some 637,000 people have signed up to its superfast 4G service – a figure that is lower than arch rival EE.

Currently Vodafone only offers 4G in collaboration with Sky Sports or music download service Spotify.

But chief executive Vittorio Colao said the group was not wedded to the strategy, and could begin offering 4G-only packages in the coming months to appeal to a wider base.

It is aiming to have 99 per cent of the UK covered by the superfast service by March 2016. The rate at which its service revenues were falling slowed to 1.6 per cent in the final quarter of the year, down from 3.3 per cent the previous three months and 3.5 per cent a year earlier.

In Europe, Vodafone took a financial hit to its businesses in Germany, Spain, Portugal, the Czech Republic and Romania.

It has written some £18bn off struggling European arms in the last three years.